I have a confusion. When we have a currency backed by gold and convertible in gold on demand, are we not artificially pushing up the gold prices as the productivity increases? For example at the beginning 1 ounce of gold might be able to buy 1 ton on wheat. As the productivity gains and we are able to produce the same amount of wheat with much less effort, 1 ounce of gold might buy 2 tons of wheat. As the productivity keeps gaining, gold prices would keep gaining to a point where people may not want to pay such high price to make gold jewelery.
I could see this used as an anti-gold standard argument in favor of “saving the jewelry industry”. “Vote no on gold standard, save American jobs.”
I hope you use this forum as a medium to educate people and not make allegations!! If you don’t have an answer, please keep off. I already stated that I have a confusion.
I’m not sure of the metallic make up of gold coins. There are different variations of the quality of the gold used in jewelry (measured in karats). A less pure gold would obviously be less valuable than a more pure gold. Higher quality gold jewelry might go up in price, but if people aren’t willing to pay that price for higher quality then they will opt for substitutes or lower quality gold jewelry.
“are we not artificially pushing up the gold prices…”
what is artificial about commodity money doing what it is supposed to do?
Money is a store of value. If people choose gold as a store of value, and people use gold in jewelery, then the value doesn’t disappear.
Let’s say you have two goods. If you are producing more of one good, while not as much of another (assuming the demand stays the same), then you will be pushing up the price of one good, quoted in the other good. If people find something desirable and it is hard to obtain, compared to other things, its price is very likely to rise. Supply and demand, there is nothing artificial about it.
As for jewelry: well, many goods have more than one use. Some application may end up to be so desired, that it it could crowd out any other application of the good. If there was suddenly an amazing new technological use for gold, jewelry could become prohibitively expensive (same for those medical applications, if it turned out to make anyone 200 years old, few would waste it on earrings). Of course, there are other, competing precious metals waiting to be used more for this purpose, so don’t despair, you can have your bling. 
(And not to forget, this cuts both ways: the higher the price of gold becomes, the more interesting it is to explore other materials for coinage and its other uses.)